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The Allstate Corporation (ALL), headquartered in Northbrook, Illinois, is the third-largest property-casualty insurer and the largest publicly-held personal lines carrier in the U.S. Valued at $47.6 billion by market cap, It offers a variety of insurance and investment products to households, primarily through exclusive agencies and financial specialists across the U.S. and Canada.
Shares of this leading property & casualty insurance company have significantly outperformed the broader market over the past year. ALL has gained 69.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.8%. In 2024 alone, ALL stock is up 27.8%, surpassing SPX’s 17.8% rise on a YTD basis.
Zooming in further, ALL has also surpassed the Invesco KBW Property & Casualty Insurance ETF (KBWP). The exchange-traded fund has gained about 35% over the past year. Moreover, ALL stock’s gains on a YTD basis outshine the ETF’s 22% returns over the same time frame.
Shares of Allstate surged 5% on Aug. 14, reaching an all-time high, driven by positive analyst moves and a major asset sale. The company announced the sale of its employer voluntary benefits business for $2 billion to StanCorp Financial. This divestment is part of Allstate's strategy to exit its health and benefits operations, and it expects to gain $600 million and increase deployable capital by $1.6 billion from the sale.
Moreover, the company released its Q2 earnings report on Jul. 31, and the stock popped 3.7% in the following trading session. Total revenues for the quarter rose to $15.7 billion, up $1.7 billion year over year, mainly due to higher property-liability earned premiums. Adjusted net income was $429 million, or $1.61 per share, compared to an adjusted net loss of $1.2 billion or $4.42 per share in the prior year.
For the current fiscal year, ending in December, analysts expect Allstate’s EPS to grow 1,493.7% to $15.14 on a diluted basis. The company’s earnings surprise history is robust. It beat the consensus estimate in each of the last four quarters. In the recent quarter, it surpassed the consensus earnings estimate by an impressive 387.9%
Among the 19 analysts covering ALL stock, the consensus is a “Strong Buy,” a step up from “Moderate Buy” two months ago. That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” two “Holds,” and one “Strong Sell.”
This configuration is more bullish than two months ago, with 14 analysts suggesting a “Strong Buy.”
On Aug. 16, Piper Sandler Companies (PIPR) analyst Paul Newsome raised the price target for Allstate to $196 from $188 while maintaining an “Overweight” rating on the shares.
The mean price target of $195.29 represents a 9.2% premium to ALL’s current price levels. The Street-high price target of $226 suggests an upside potential of 26.4%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
